Financial Incentives for building an energy efficient home

Eco friendly homes have been around for a while, but they continue to gain popularity every year and we don’t expect that trend to slow down any time soon. The reasons for this are pretty straightforward: we’re all becoming more aware of our impact on the world around us. And, as technology improves, the costs associated with constructing a new house continue to go down. Beyond this, there are many different financial reasons for making your new home energy efficient.

How expensive is making a house energy efficient?

When constructing a new house, the most pragmatic question weighing on people’s minds is usually directly tied to costs. How much upfront? How much will I save? How much can I commit to this, even if it’s one of my strongest beliefs? Think about the last time you bought a home—it’s stressful enough as is, being the largest financial decision most of us will ever make.

The good news is that a green home will pay off. We’re not talking cosmically, like your great grandchildren appreciating you doing your part to keep the earth green (although, duh, that’s a plus). We can get a little selfish here, after all, we are doing good. Across the country, houses that were constructed to be eco friendly, especially when the homeowner owned solar panels, were found in a study by Berkeley Lab to sell for more than their counterparts. Additional studies confirm that solar improves a home’s resale value (although it’s important to keep in mind that how much value varies by location and should be weighed out compared to the costs of installing solar, which we’ll cover below).

With millennials becoming the largest group purchasing homes, the demand for environmentally conscious homes is only going to increase. More than two thirds of this demographic buy as many eco friendly products as possible. (2)

What does this mean for you? Well, if you ever decide to sell your house, you’ll have a leg up on others. Greater demand = a larger selling price. Pretty simple, right?

That’s great. But let’s talk about construction costs.

Sounds good to me!! If you’re building a new home, you’re probably sweating the upfront costs, and for good reason. Fortunately, there are tons of programs, both private and public, incentivizing eco friendly homes.

There are too many private programs to count but here’s just one great example: Home Depot has an Affordable Housing Built Responsibly program to help with costs. The best bet with this route is to talk to a contractor you trust and see what’s available in your area.

You could also start at the federal level. There are financial incentives and tax breaks for a vast array of energy efficient and green construction projects. The numbers change year to year though, so we won’t get into specifics here.

An awesome program we WILL talk about is Energy Efficient Mortgages (EEM). These can give you credits towards your home mortgage costs depending on how energy efficient you construct your home. Increased value at a lower rate, what’s not to love?

If you’re buying an existing home, there are still programs out there to help you out. An Energy Improvement Mortgage (EIM) can potentially allow the buyer (that’s you) to include the cost of efficiency improvements, without increasing your down payment. You’re not only improving your future, but the planets as well. That’s what our 2nd grade teacher told us is called a win win situation.

Let’s get local

While the above programs can apply to all Americans, the incentives roll down to the state and local levels. Now, this can make sifting through the data daunting, to say the least. States like Texas, California, and Minnesota lead the way with 100+ programs each, while other places such as Maine, Mississippi, or Nevada have far fewer.

Like everything else in life though, the work is rewarding. Any contractor or builder worth their salt will be able to help walk you through some of these programs, and EnergyStar.gov also offers a fairly comprehensive index of local programs. You can also visit this database to easily find programs in your area.

These are great. But all pretty big endeavors.

We’ve mostly covered situations for those building or buying a home but there is plenty you can do to your existing home to make it more energy efficient.

Simple, small things can actually make a giant difference. One example is ensuring your insulation meets efficiency standards. This alone could cut energy bills by almost 10%, and could potentially qualify you for incentives upon installation.

We also mentioned Energy Star earlier. They also rate a large range of devices and appliances to ensure your home saves green (whichever way you want to interpret that). These appliances can gain you anywhere between 10 - 50% in efficiency. You can even optimize your home and savings with something like a smart thermostat.

One final thing to consider (which will come as no surprise coming from us) is solar for your rooftop. There are a lot of factors that contribute to the financial implications of solar for each individual homeowner—ranging from your specific roof to personal household energy habits to financing options to state and local incentives—but saving money with solar is a reality for thousands of homeowners in the United States. The easiest way to figure out if solar makes financial sense for you is to set up a free consultation so we can provide a custom estimate and design proposal.

At the end of the day, you may have to do a little digging. But if you want to go green (and why wouldn’t you?) there are plenty of ways out there to do it.